Big Trump card could hit Indian IT, pharma! Five takeaways from presser

NEW DELHI: The first presser of US President-elect Donald Trump could put IT and pharma stocks in a tight spot when the domestic market opens for trading on Thursday.

Dow Jones, which was trading near the 20,000 mark ahead of the press conference, quickly pared gains towards the end of the session. However, SGX Nifty was trading with a slight positive bias at the time of writing of this report.

Here is a list of top five takeaways from Trump’s presser:

Need for competitive drug pricing: Trump said pharmaceutical companies were "getting away with murder" in drug pricing and promised that it would all be changed.

He emphasised bringing back drug industries to the US. “We are the largest buyer of drugs in the world, and yet, we do not bid properly,” he said. Trump said US firms were going to start bidding and going to save billions of dollars over time.

Replacement of Obamacare: Commenting on the Obamacare, Trump said he would repeal and replace Obamacare shortly after price approved, which could impact pharma companies. He vowed to make healthcare less expensive and far better.

“Replacement of Obamacare will in some way impact Indian pharma sector,” Ajay Dua, former DIPP secretary, said in an interview with ETNow.

He said anybody doing business with the US needs to be guarded against Trump's policies

Outsourcing: The much-awaited news for Indian investors was Trump’s view on outsourcing. The word is now out that outsourcing of jobs by US firms is not going happen anymore.

Earlier in the month, US Congressmen had reintroduced a bill that tried to up the ante on H1B visas. The bill seeks to raise the H1B salary benchmark from $60,000 to a minimum of $100,000 to be able to work in America, which would hit the Indian IT industry and a lot of non-IT workers.

Nasscom president was quick to react on Trump’s statement, saying: “Trump’s policies may not be all bad for Indian IT firms doing biz in the US.” He said India needs to communicate how much business the IT companies bring to the US economy.

Border Tax: The US President-elect said he would like to be known as the greatest job creator that the god ever created. One such measure in that direction would be to impose border tax to discourage companies from moving their factories outside the US.

Trump praised Fiat Chrysler and thanked Ford Motor for building plants in the US. Earlier this week, Fiat Chrysler announced plans to invest in US plants and create jobs, while Ford said it would expand in Michigan rather than build a plant in Mexico.

“I appreciate that from Ford. I appreciate it very much from Fiat Chrysler. I hope General Motors will be following suit,” Trump said.

Avoid conflict of interest: Trump said he would hand over control of Trump Organisation to his two eldest sons, but will not fully divest or create a blind trust, as the Office of Government Ethics and former White House ethics lawyers have called for him to do.